Investment applications to slump this year: Boi

"The main problem right now is global economic concern, which we can't control, so net applications in the second half should drop dramatically. If we get Bt300 billion worth of net applications this year, then we'll be happy," said Chakramont Phasukvanich, permanent secretary of the Industry Ministry.

Lower investment has been mainly caused by the worldwide murky economic climate, particularly the sub-prime crisis in the United States and United Kingdom, as well as the rising cost of oil, inflation and political turmoil.

However, the political problems here have not given such a strong impetus to investors shifting their projects to other countries, Chakramont said.

The Board of Investment's first-half net investment applications of Bt203.7 billion were down Bt235 billion from the same period last year. Net applications for all of last year had surged to Bt655.8 billion due to large-scale eco-car, petrochemical and transportation projects.

"We don't think we can grant more incentives to promote investment. What we can do is to do more public relations and stage roadshows to explain the actual economic and politic situation to them," he said.

For the rest of the year, many industries - particularly electric and electronics - will stay on the growth path, due to high demand because of cheaper prices and rapid product turnover. Automobiles and auto parts will also perform well on strong demand for diesel-engine vehicles in Europe.

The sensitive industry that will prune production capacity is consumer products, which faces lower domestic purchasing power.

Industries gulping energy in their production process, such as ceramics and glass, also face a grim future as they lose control of their costs from rising oil prices.